'Individual Liberty Can't Override Interest Of Defrauded Investors': Calcutta High Court Denies Bail To Duo In ₹2,862 Crore ED Case

The Calcutta High Court has rejected the bail applications of Prayag Group's directors, observing that they failed to discharge the twin condition test under the Prevention of Money Laundering Act, 2002 and their status as proclaimed offenders. While hearing the bail applications, the division bench of Justice Rajarshi Bharadwaj and Justice Uday Kumar also emphasized, "the liberty of an individual cannot be viewed in isolation from the collective interests of thousands of defrauded investors. The petitioners' failure to discharge the "Twin Conditions," coupled with their conduct as Proclaimed Offenders, creates a formidable legal barrier to their release". Basudeb Bagchi and Avik Bagchi, the Principal Directors and 'Guiding Spirits' of the Prayag group, filed an application for regular bail in a case registered under the PMLA.According to the ED, the petitioners orchestrated a large-scale fraud, duping thousands of investors of approximately ₹2,862 crore through a deceptive facade of "Time Share," real estate, and gold-based investment schemes. Although the petitioners claimed to have made partial restitution amounting to ₹1,140 crore, investigation revealed an unaccounted deficit of ₹1,906 crore.Counsel for the petitioners contended that the present ECIR is a mirror image of the earlier 2016 investigation, as both arise from the same predicate offence and are founded on the common CBI final report. It was argued that the petitioner's incarceration for over eight months amounts to pre-trial punishment, infringing their fundamental right to personal liberty. Opposing the bail plea, the ED argued that the current ECIR focuses on fresh proceeds of crime and distinct layering activities undertaken after 2016. The offence, it was argued, is continuing in nature and distinct from the earlier proceedings, thereby not attracting the constitutional bar of double jeopardy under Article 20(2) of the Constitution. The ED further argued that the petitioners were proclaimed offenders after repeatedly evading the judicial process. Their conduct, it was submitted, squarely fails the 'Tripod Test' governing bail, namely, likelihood of flight, tampering with evidence and influencing witnesses. The bench observed that the protection against double jeopardy only gets triggered after the conclusion of trial in a conviction or an acquittal. However, in the present case, the trial on the prior ECIR is still ongoing, and therefore bar under Article 20(2) was not applicable.The court further held that if the petitioners, while enjoying liberties post 2016, generated fresh illicit funds, such conduct constitutes a distinct cause of action. The bench observed, "Article 20(2) is a shield for the innocent; it is not a license for prospective criminality nor does it provide an umbrella of immunity for subsequent illegalities committed during the pendency of a prior investigation". In light of the unaccounted deficit money of ₹1,906 crore and prima facie material indicating fresh layering of proceeds of crime post 2017, the court held that it was unable to record satisfaction that there "that there are "reasonable grounds" to believe the accused are not guilty". Further, the bench noted that the case of the petitioners failed the tripod test, noting that they systematically evaded non-bailable warrants and showed a clear propensity to evade justice. Further, the bench noted that while the first proviso to Section 45(1) of PMLA vests discretion to grant bail to the elderly or infirm person, it does not mandate automatic release. The bench empahsizing that the petitioners' case failed the twin condition test under PMLA and their status as a proclaimed offender, dismissed the applications. Case Title: Basudeb Bagchi v ED [CRM (M) 932 OF 2025]Click here to read/download the Order

'Individual Liberty Can't Override Interest Of Defrauded Investors': Calcutta High Court Denies Bail To Duo In ₹2,862 Crore ED Case

Jayanti Pahwa

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